Gold has been on a slow but steady increase this past year, and the signs suggest that further heights are yet to come. Gold predictably responds to certain economic and political factors, and while there is still a lot of debate about how one thing will affect the price of gold, the outlook for the next year seems positive. Here’s why:
Interest Rate Hikes – At the start of 2017, economists were predicting that interest rates hikes from the Federal Reserve were inevitable, and they were proved correct. The Fed has been consistently raising interest rates this year in the wake of strong US economic growth, joining many other countries across the world finally emerging from the stagnant economic years that followed the recovery from the 2008 financial crisis. Now the Fed wants key interest rates at 1.5% by the end of the year, and while there is no direct correlation between interest rates and the price of gold, interest rates do affect the stock market, and stock declines push gold up.
When interest rates are high, investors prefer bonds to much riskier stocks. Higher interest rates also mean companies face higher financing costs, and the net result is pressure on stock prices. When stocks plummet, investors turn to gold to protect their assets, and the price surges. Anyone interested in more information on buying gold should check out our website or talk to us. At Silver Gold Bull, we do our best to provide customers with all the information they need to make an informed investment.
Political Tensions – When major geo-political conflicts start brewing, people start seeing the appeal of gold and here at Silver Gold Bull, we start seeing an increase in orders and the spot price. The US government consistently prints a lot of money to finance wars and that leads to high inflation.
Climate Change Anxiety – With major weather events causing hundreds of billions of dollars of damage worldwide, climate change anxiety is starting to hit investors. Not only will it be expensive for the government to start rebuilding in devastated regions, climate scientists expect that these kinds of “once-in-a-century” storms will start happening a lot more regularly.
When big storms and out-of-control wildfires seize headlines, investors start to doubt the value of currency in a world shaped by climate change. At Silver Gold Bull, we see investors worried about the fate of their wealth in a crisis. Hyperinflation could easily eat away your hard-earned savings if you keep it in currency.
Now that you’re interested in buying gold, the question is where do you go. Anyone who wants to buy gold or silver in Toronto needs to go no further than their home computer. As one of Canada’s largest and best stocked gold dealers, we sell gold online across the country. Visit regularly to see our special offers and ways to save when you buy gold.